ledger account for college assignment .pdf

Ledger account pdf or ppt all about ledger account covered in this ppt this ppt for college assignments

1. TOPIC
LEDGER
Presented by

2. INDEX
INTRODUCTON
DEFINITION
FORMAT OF LEDGER
TYPES OF LEDGER
UTILITIES OF LEDGER
DIFFERENCE BETWEEN JOURNAL AND LEDGER
PROCEDURE OF LEDGER POSTING
BALANCING OF LEDGER POSTING

3. INTRODUCTION
A ledger account is a journal in which a company holds data for
all transactions and financial statements. The company’s general
ledger is organised under the general ledger, and the balance
sheet is assets, accounts receivable, accounts payable,
shareholders, accounts payable, stocks, income, taxes, expenses,
profits, losses, funds, loans, bonds. It is split into multiple
accounts such as, stock, and salary. Wages etc.

4. A ledger, also called a general ledger, is a record of a business’s
financial transactions. It summarises all the revenue and expenses
of the business, plus the debts owed and assets owned.
The transactions in a general ledger are organised into five main
types; assets, liabilities, equity, revenue, and expenses.
DEFINITION
According to L.C. Cropper, “The book which contains a classified and
permanent record of all transactions of a business is called the
Ledger.”

5. FORMAT OF
LEDGER
Ledger is a T-format account
where the debit is depicted on
the left side, and the credit is
depicted on the right side. The
columns include date,
particulars, journal folio (JF),
and amount.
01.
02.
03.
TRANSACTiON
LEDGER
JOURNAL/
SUBSIDIARY BOOKS

6. Debit: The debit side of an account represents when the debit increases.
Credit: The credit side of an account represents when the credit
increases.
Date: The date on which the transaction takes place.
Particulars: The contra entry of the concerned account according to the
double entry system is shown under this head.
Journal Folio: The reference number of the journal entry from the journal.
Amount: It is the amount debited or credited to a particular amount during
the transaction.

7. TYPES OF LEDGER
01 02
General ledger Sales ledger or
debtor's ledger.
.
03
Purchase ledger
or creditor's
ledger.
.

8. 1. Sales Ledger
Sales Ledger is a ledger in which the company maintains the transaction of selling
the products, services or cost of goods sold to customers. This ledger gives the
idea of sales revenue and income statement.
2. Purchase Ledger
Purchase Ledger is a ledger in which the company organizes the transaction of
purchasing the services, products, or goods from other businesses. It gives the
visibility of how much amount the company paid to other businesses.

9. 3. General Ledger
General Ledger is divided into two types – Nominal Ledger and Private
Ledger. Nominal ledger gives information on expenses, income,
depreciation, insurance, etc. And Private ledger gives private
information like salaries, wages, capitals, etc. Private ledger is not
accessible to everyone.

10. Utilities of ledger
i) Quick information about a particular account
Ledger account helps to get all information about a particular account like sales,
purchases, machinery, etc., at a glance. For example, where there are several transactions
with a debtor, the net amount due from a debtor can be known from the ledger account.
ii) Control over business transaction
From the ledger balances extracted, a thorough analysis of account balances
can be made which helps to have control over the business transactions.

11. iii)Trial balance can be prepared
With the balances of ledger accounts, trial balance can be prepared
to check the arithmetical accuracy of entries made in the
journal and ledger.
iv) Helps to prepare financial statements
From the ledger balances extracted, financial statements can be prepared
for ascertaining net profit or loss and the financial
position.

12. There are several reasons why ledger entries are oh-so-important. Ledger entries:
Why are ledger entries important?
Keep you organized
Make it easier to find transactions
Compartmentalize transactions
Let you see the big picture of your company’s financial health
Show you patterns in income and expenses

13. Journal is a subsidiary book of account
that records transactions.
Ledger is a principal book of account that
classifies transactions recorded
in a journal.
The journal transactions get recorded
in chronological order on the day
of their occurrence.
The ledger classifies the transactions
from the journal under the respective
accounts to which they are related.
JOURNAL LEDGER
DIFFERENCE BETWEEN JOURNAL
AND LEDGER

14. The journal does not reveal the
total results of a transaction.
The Ledger accounts help reveal the
result of transactions for a particular
account.
Each journal entry has a detailed
narration of the transaction.
The ledger accounts do not have a
detailed narration of each transaction.
The journal cannot help prepare
the Trial Balance directly.
The ledger helps to prepare
the Trial Balance.
A journal does not have an opening
balance, and it is only concerned
with the current transactions that occur
on a day-to-day basis.
Some ledger accounts have an
opening balance, which is the
closing balance from the previous year.

15. PROCEDURE OF POSTNG
The format has two sides namely debit and credit with the date
of transaction, account by which it is debited or credit, the JF
note and respective amounts.
A general ledger explains the further step of accounting commonly
called posting accounting definition. It refers to keeping records or
hold information of individual accounts operations separately that are
mentioned in the journal.

16. First part of the Account:
1. Locate in the ledger, the first Account named in the journal.
2. Write the date of the transaction, in the date column, in debit-side of
that account.
3. Enter in the debit-side of the ledger, in particulars column, the name
of the Account credited with prefix “To”.
4. Write in folio column on the debit-side of the account, the page
number of journal from which the entry is being posted.
5. Enter the amount, on the debit column of the ledger as per journal.
6. Similarly, write the ledger page number in the folio column of the Journal.

17. Second part of the other Account:
1. Locate in the ledger, the second Account named in the Journal.
2. Write the date of the transaction, in the date column on credit side of
that Account.
3. Enter in the credit-side of the ledger, in particulars column, the
name of the Account debited with prefix “By”.
4. Write in the folio column of the ledger, the page number of the
journal from which the entry is being posted.
5. Enter the amount on the credit side of the ledger as per the journal.
6. Similarly, write the ledger page number in the folio column of the journal.

18. Example: Record the following transaction and post them into
ledgers:
On 1st Dec. 2004, Ram started business with a capital of Rs.
50,000

20. Balancing of ledger accounts
Balancing means that the debit side and credit side amounts are totalled and
the difference between the total of the two sides is placed in the amount
column as ‘Balance c/d’ on the side having lesser total, so that the total of
both debit and credit columns are equal.

21. ILLUSTRATON 1
Thmizhanban started book selling business on 1st January, 2018. Following are the transac-
tions took place in his business for the month of January, 2018. Pass journal entries and pre-
pare ledger accounts.
2018
Jan. 1 Started business with cash Rs. 3,00,000
Jan. 2 : Opened bank account by depositing Rs. 2,00,000
Jan. 5 : Goods bought from Tamilnadu Textbook Corporation for cash Rs. 10,000
Jan. 15 : Sold goods to MM Traders for cash Rs. 5,000
Jan. 22 : Purchased goods from X and Co. for Rs. 15,000 and the payment is made through net
banking.
Jan. 25 : Sold goods to Y and Co. for Rs. 30,000 and the payment is received through NEFT

27. 2. Direct ledger posting
Prepare cash account from the following transactions for the
month of January 2018.
Jan 1
Commenced business with cash Rs. 62,000
Goods purchased for cash Rs. 12,000
Goods sold for cash Rs. 10,000
Wages paid Rs. 4,000
Furniture purchased for cash Rs. 6,000

28. Solution
Ledger accounts.

29. Thank You